If you work as a real estate broker or agent long enough, you will eventually get dragged into a lawsuit over some kind of issue the buyer has with the property he/she purchased. If the lawsuit is even remotely related to questions about the adequacy of the seller’s disclosures or some other issue involving the condition of one or more components of the home in question, you may find your salvation comes from an unusual source…the buyer’s home inspector. Yes, you read that right.
inspectors Blog Posts
Over the past few years, more and more E&O insurance carriers offering coverage to home inspectors are asking a question about pre-inspection agreement use on an application for new/renewal coverage. The question reads slightly differently from carrier to carrier, but the essence of the question is whether you obtain a signed pre-inspection agreement from all of your customers.
I’m not sure when it happened, but sometime in my lifetime the family home stopped being where you chose to live to raise your family and put down roots and became an investment asset. It seems this transformation began when investment bankers on Wall Street first realized residential mortgage lending represented a potential source of huge profits.
Philosopher George Santayana once said, “Those who cannot remember the past are condemned to repeat it”. In light of recent actions in the mortgage lending industry, we all may be able to experience the thrill ride of 2007-2009 all over again…soon. You may wonder what actions I am referring to so let me share a brief list of what I will call the top ten contributing factors to the downturn I see happening by July of 2017.
In a rare occurrence, a New Jersey Court recently enforced the State’s prohibition against frivolous litigation against a plaintiff who sought to sue a home inspector following a failed real estate transaction.
While much has been written about the multitude of complex reasons behind the collapse of the real estate market in 2007, it is the opinion of this writer that there is one primary reason for the collapse. Simply stated, banks loaned money to borrowers who lacked the ability to pay back the loan. That’s it, pure and simple. If you loan money to someone who has no resources to pay back your loan, you will lose money almost every time and it matters very little if you have any collateral for the loan. This should be known as the prime directive: “Thou shall not loan money to someone who cannot pay you back.” There certainly are many other reasons behind the collapse, but if the “system” had not violated the prime directive the collapse would not have been so sudden, so precipitous, and so prolonged
Between accepting assignments, working with clients, and preparing reports, finding time to meet your state’s continuing education requirements can be a real hassle. However, keeping your license current and in good standing is a must for any real estate professional.
Insurance: that annoying but potentially beneficial thing we pay good money for and hope to never use. Insurance can protect your car, your business, your family, your home and more. The downside? It can often put a big red target on your back that says “sue me.”
When I was in law school about 100 years ago, my real property professor mentioned “caveat emptor” in almost every class. Loosely translated this means “let the buyer beware.” The legal principle behind “caveat emptor” is that a person who buys something without any kind of warranty is responsible for making sure it is in good condition, and if they don’t take this responsibility, then tough luck.
The latest and greatest technology may be a boon to your home inspection business, but it’s likely not covered by your E&O carrier. While tech advances quickly for inspectors, insurance companies have yet to catch up and therefore may not offer appropriate levels of coverage just yet.